“The direction is correct, the magnitude has several reasons,” said Diana Avigdor, head of trading at Barometer Capital Management. She said the move higher was likely exaggerated by lack of liquidity, option expiries, overnight headlines out of Asia and the U.S. crude stockpile data.

The most influential positive movers on the index were Suncor Energy Inc (SU.TO), which bounced 4.2 percent to C$34.81, and Canadian Natural Resources (CNQ.TO), which jumped 6.3 percent to C$27.98.

The financials group, including Canada’s largest banks and their exposure to the energy sector, climbed 2 percent.

The Fed is due to announce a decision on Thursday afternoon to either end or extend seven years of near-zero interest rates, potentially relieving markets of months of uncertainty as investors have been trying to predict the timing for a hike.

Avigdor said clarity from the Fed should help push equities higher, though crude oil price volatility will remain a risk.

“It’s watching paint dry for the next 24 hours,” she said.

The materials group jumped 3.8 percent. Combined with financials and energy, the three sectors make up almost two-thirds of the index’s weight.

“There’s a sense that the Fed won’t increase rates tomorrow. We’ll have to see if that’s the case,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“If that’s the mentality, then the U.S. dollar may come off a bit more and commodities may rally some more. I don’t know how sustainable that is, but that seems to be what’s going on currently.”